Must Read Research: SpaceX; The Next AI Winners; Europe’s Earnings Momentum; Buy Value
The desk interprets BofA's latest research as a strong endorsement of the expanding opportunities in the global market, especially in the rapidly evolving space economy and AI sectors. Per the full note, the commentary highlights Europe’s improving earnings momentum, signaling a potential shift in investment strategies toward value-focused equities. Current market dynamics suggest a broadening away from traditional leaders, as newer sectors like space and AI capture investor interest. The desk is particularly focused on how these themes could play out in upcoming currency movements, although no prominent calendar catalysts are in sight to spur immediate shifts.
What the desk is arguing
The desk frames BofA's insights as a pivotal moment for institutional traders to recalibrate portfolios towards emerging technologies and European equities. Recently outlined growth potential in the space sector and AI suggests a rapid evolution in connectivity and productivity that could fundamentally alter competitive dynamics in multiple markets.
As these sector advancements gain traction, earnings momentum in Europe is notably recovering, which may provide fertile ground for value investments amidst previously crowded market segments. This shift is further underscored by the Research Investment Committee’s views, which indicate a lingering interest in equities driven by a thoughtful move away from growth-oriented stocks.
Where it sits in our coverage
Our consensus target for the relevant market is 1.075, with a range spanning from 1.04 to 1.12. Notable targets among firms include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This desk's interpretation aligns closely with jpmorgan, which holds a bullish stance, while diverging from bofa, suggesting a more cautious approach given their lower target within the same time frame. The current analysis favors the upper end of the expected range, indicating strong confidence in the broader economic narratives emerging from the commentary.
How other firms see it
Aligned firms such as jpmorgan reflect a synchronized optimism regarding the expanding space and AI markets, while bofa presents a more conservative perspective. The contrasting views suggest a bifurcation in market sentiment, with potential implications for how currency pairs, particularly those influenced by European earnings and AI innovations, may react to shifts in economic data.
Additionally, watch the trajectory of EUR/USD as it could offer insights into the strength of European markets in relation to the bullish trends noted in the BofA report.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Emerging sectors like space and AI are reshaping investment opportunities.
- 02Europe's earnings momentum shows signs of recovery after years of stagnation.
- 03The market is transitioning towards value investments away from traditional leaders.
- 04BofA's commentary suggests a strategic shift for institutional investors.
Market implications
With the current momentum in sectors highlighted by BofA, traders should closely monitor the EUR/USD pair for signs of strength or weakness, reflecting the broader economic narratives. Any adjustments in European economic forecasts or significant corporate earnings releases could enhance or diminish these movements.
Risks to this view
The primary risk to this thesis lies in unexpected economic deterioration in Europe or a slower-than-anticipated pace of technological advancement in the space and AI sectors. If central banks signal a tightening of monetary policy sooner than expected, it could significantly impact investor sentiment and market valuations.
Hello, and welcome to Must Read Research on B of A Global Research Unlocked. In this podcast, we offer quick summaries from the prior week's most interesting and impactful research. I'm Candace Browning, Head of Global Research at B of A Securities, and we're recording this episode on Monday, July 13th, 2026.
Science opened new frontiers for commerce. SpaceX rockets are doing the same for the space economy. This week, we feature this provider of new infrastructure, a wireless carrier positioned on the right side of the low-Earth orbit broadband build-out, and discuss AI winners beyond the U.S. and China.
Meanwhile, Europe's earnings revisions and the RIC highlight a broadening recovery and opportunities beyond crowded index leaders and AI. So let's begin with the rapid expansion of the space economy and the infrastructure supporting it. The race to expand access to space is accelerating, driven by growing demand for launch services, satellite connectivity, and emerging computing applications.
SpaceX has completed more than 650 launches with a mission success rate above 99%, and today carries more than 80% of global mass to orbit. A key focus for SpaceX is the development of fully reusable launch systems, which could significantly reduce the cost of accessing space and support a wide range of future applications, from next-generation satellite networks to orbital computing. At the same time, advances in satellite connectivity are reshaping the telecommunications landscape.
So will SpaceX and Starlink completely take over telecommunications? Probably not. Those terrestrial networks, such as T-Mobile, with strong positions in densely populated markets, may be just fine, as satellites are less effective in urban areas and those carriers also have some pricing flexibility.
From space infrastructure to digital infrastructure, let's turn to the global race to capture the benefits of AI. In a report titled AI Matters, our global economics team looked beyond the U.S. and China for the next AI winners. Using two country-level frameworks to measure near-term build-out exposure and long-term productivity gain potential, we identified South Korea as the standout contender because it combines semiconductor leadership, rapid AI diffusion, strong policy support, and labor market adaptability.
The surprise all-rounder is the UAE, backed by sovereign investment, abundant energy, and the highest AI adoption rate among working-age adults in the world, 70% versus just 31% in the U.S. Taiwan, Australia, and Japan also look well-placed for the AI build-out phase, though it is less clear how much of that will translate into long-term productivity gains. India shows the opposite pattern, stronger long-term potential than short-term build-out exposure, and it is already the largest adoption market for chat GPT, Gemini, and Perplexity.
Sources & References
How we cover this story